Why the Uber case matters

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The Supreme Court’s decision that Uber drivers are to be considered workers has been hailed as a landmark ruling for the UK’s gig economy. Though there is the possibility that this brings benefits to thousands of Uber drivers, and possibly to millions employed in the gig economy, it remains a controversial decision for a number of reasons.

On a positive note for those involved, the decision may mean that Uber drivers are entitled to statutory employment rights afforded to workers that are not afforded to the self-employed, such as minimum wage, holiday and sick pay, and pensions contributions. Those that brought the case forward could also be awarded thousands of pounds in compensation pending a tribunal decision.

There have been issues at Uber with low pay and long hours and purported exploitation in the gig economy, on the whole, so for many, this ruling will come as a significant relief.

The essence of the gig economy is its inherent flexibility

Nonetheless, it is unknown exactly how far-reaching the ruling is, though there are those who believe the ruling will apply to all Uber drivers in the UK, and that similar claims from within the gig economy could increase as a consequence. The judgment does not render all those employed in the gig economy ‘workers’ in the legal sense, but the ruling is impactful regardless.

The decision comes off the back of a vote in California back in November that exempted Uber drivers from employee status. It also arrives only 2 months after Just Eat announced it was to offer over 1000 workers hourly wages and sick pay – a move labelled by the Financial Times as ‘setting a new precedent in the gig economy.’ The Uber case is undoubtedly of larger consequence.

Uber has publicly accepted the ruling and has promised to make moves to improve the working conditions of its drivers. Whilst there are things to cheer about, a few issues will arise as a result of the ruling.

The Institute of Economic Affairs has said that the decision may result in higher prices for passengers (often young people) and lower accessibility and availability of rides. There is also a balance to be had, as the essence of the gig economy is its inherent flexibility, which might be incompatible with the additional security of rights now gained.

The entire framework upon which Uber operates could be under threat

Indeed, the entire framework upon which Uber operates could be under threat – not just for its workers, but for customers too. The wider implications of the judgment, as yet unseen, could be mixed.

Another unknown is the impact that such a decision might bring to the economy on the whole, especially in the midst of coronavirus. Additionally, there is the issue of judicial policy-making. It is questionable that judges should have the power to possibly re-jig (or at least, begin a re-formulation of) an entire sector of the economy with the passing down of a single judgment, rather than the democratically-elected Parliament acting through legislation. This will ultimately be a matter of opinion.

The Uber case, therefore, sets a significant, but potentially menacing precedent, both economically and constitutionally. Whilst undeniably a win for the claimants, and a landmark employment law case in one of Uber’s largest markets, it is a case that will have significant implications regardless of its eventual ambit. Such impacts are not yet known, but they will arguably be mixed on the whole, particularly if this result is as far-reaching as Uber and other players in the gig economy might fear.

Image: Charles Deluvio on Unsplash

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